Building Outside Silicon Valley Helped Grooveshark Succeed

Silicon Valley may be thought of as the entrepreneurship capital of the world, but not every entrepreneur is dying to build a company there.

Grooveshark co-founder Josh Greenberg says their headquarters in Gainesville, Florida may not be a startup hotspot, but it's helped the company succeed. " I really don't believe something like Grooveshark—from our product to our personnel—could come out of most places like Silicon Valley," he says. "The music industry is tightly competitive, and being in Gainesville has really helped us stay lean. I don't have to tell you the difference between a nice apartment for rent between Gainesville and a Manhattan or Mountain View." Additionally, he says their location ensures that anyone working at Grooveshark does so out of passion and a true drive to help innovate rather than a paycheck.

Greenberg says it's all about finding the right place for your company. "Silicon Valley is a great community, and has a great roster of successful companies, but that doesn't mean it's the right fit for everybody. The University of Florida is probably mostly known for Gatorade and Tim Tebow, but there is a great community of investors, techies, and impassioned entrepreneurial students that make for a great mix that has worked right for Grooveshark."

Grooveshark co-founder, Josh Greenberg.It was the University of Florida where Greenberg started Grooveshark, but his entrepreneurial journey started much earlier. "I didn't always know I wanted to be an entrepreneur, but then again I started being one before I knew I wanted to be one," Greenberg says. "In high school I started off with simple development work for clients, but didn't think too much of it at the time. When I moved away for college, I began to take on larger projects. Over time entrepreneurship grew into something that I've become very passionate about."

While he was passionate about entrepreneurship, the passion for music came from his co-founder Sam Tarantino, who is a musician himself. "When we first talked about the early idea for Grooveshark it was apparent that music definitely drove him," he says. "My interest in music, in particular, is that it is something that naturally excites almost everyone on Earth - and being in a company where my day-to-day job is building a team of passionate music fans to work on a product for passionate music fans is a pretty lucky day job even in the entrepreneurial community."

Tarantino had the original idea for Grooveshark while he was a sophomore in college. "He was driving to 'donate' (read: sell) plasma to help pay the rent, and on the way he passed a used record store sporting a sign that said 'Buy, Sell, Trade,' and Sam thought 'Why can't there be a similarly fair, sustainable model for digital music distribution, too?'" Weeks later they were discussing the music industry at an entrepreneurship club meeting on campus, and the idea for Grooveshark took shape. The service is an on-demand music sharing service that allows users to create and share playlists. The site makes money through advertising and a VIP subscription service, and since its launch in 2006 the company has grown to 32 employees.

While the company had two passionate entrepreneurs at the helm, Greenberg says the biggest challenge in the early days was finding and hiring the right people. "Building a great team of only the best and brightest individuals truly is a never-ending process, and although it's a challenge, it's one I'm lucky to be able to face," he says. "I don't see our hiring standards decreasing any time soon, so it's a challenge I look forward to having for the next five years as well."

He says that while they've faced their fair share of obstacles over the last five years, hiring remains the biggest challenge. But one of the keys to that challenge is realizing that passion is contagious, so they need to tap into their existing employee base. "Something we've found true in our experience is that if you find one person who is really passionate about something—whether that's programming, music, anything—they tend to know many others who are equally passionate. Most of our best hires have been born from finding one crucial person in an area, and asking if they have any friends interested in interviewing," he says. "Passionate people are also great at recognizing genuine passion in others - we rely heavily on our employees' gut reactions to interviewees during our hiring process. If our employees get a bad feeling about a potential new hire, we take that as a serious early warning sign."

Greenberg was lucky to find a passionate co-founder to build his company. And while finding a great partner or co-founder can be difficult, Greenberg says it's especially necessary for young entrepreneurs. "Even for people with years of experience in an industry, it's easy to not know what you don't know and having a partner to bounce ideas off of can be invaluable. Everyone has strengths, and if you can find a partner who excels where you don't - or aren't interested in - it can grow your company exponentially quicker than trying to take it all on alone."

The online music space is full of Grooveshark competitors including Last.fm and Pandora. "There are a lot of players in the online music space, and more coming everyday. Some services, like Pandora, are easy to differentiate Grooveshark from because the radio service they offer is inherently different than what we do." But despite the competition, Greenberg says it's all about removing barriers between music fans and the songs they want to hear. "At the end of the day, the entire music industry is competing with piracy, so our philosophy is to focus on product development above all else, so we can provide a better experience than is available illegally."

Greenberg has said that he wants Grooveshark to be the YouTube of music. But for him it wouldn't stop at ubiquity - he would constantly keep striving to be better. "I'm really happy with the team we've built, the products we've released, and the growth we've received," he says. "Of course, YouTube is practically a verb now and is one of the largest websites in the world, which is definitely something to aspire to. Even if we reach that level of notoriety, however, we still won't feel like we've achieved everything. Has YouTube stopped innovating and improving their service?"

Greenberg follows the Nike philosophy of entrepreneurship - he says his biggest piece of advice to entrepreneurs is to just do it. "Take the risk. Now is the best time in your life to do so - after all, if you're planning on going nowhere but up, you're always going to have more to lose tomorrow than you do today," he says. "You're young—get out there! Start a company. If it fails, start another one. Keep trying, and always remember that your perception shapes the world around you, so don't settle for a low expectation of yourself."

As for what's next for Grooveshark, Greenberg says only time will tell. Whatever he does next, the location will remain the same. "Even though we're expanding our teams into places more traditionally viewed as music and tech hubs, the core of Grooveshark will always be in Gainesville."